House Financial Services Committee Chairman Barney Frank says an optional federal charter solely for life insurers is a possibility.
Speaking at a press conference last week, Frank said that as life insurance has increasingly become a financial product, it might be necessary to regulate at the federal level. Frank said concerns from European regulators about dealing with separate state regulators are a motivating factor. Frank also said he did not foresee the federal government “getting in the automobile insurance business.”
Frank Keating, president and CEO of the American Council of Life Insurers, hailed Frank’s comments.
“The federal government must develop a structure to effectively identify and address risks to life insurance markets and identify potential threats to life insurance industry consumers and the broader financial system,” Keating says. “The system endorsed by Chairman Frank will allow federally-regulated insurers to respond quickly to consumer needs for new products while adhering to state-of-the-art standards for consumer protection. Chairman Frank also recognizes that a federal system may not be appropriate for all insurers and that state oversight should remain available for those companies and their customers. We agree and will continue to work to strengthen state regulation and make it more uniform and efficient.”
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